MARKETS

• Renewed inflation jitters and the Federal Reserve (Fed) signaling fewer rate cuts led to market declines in December. The global equity index (MSCI ACWI IMI) decreased by -2.37% in December and is up +17.49% for 2024. The S&P 500, which tracks large cap U.S. stocks, decreased by -2.38% in December and is up +25.02% for 2024. The Russell 2000 Index, which tracks domestic small cap stocks decreased by -8.26% in December and is up +11.54% for 2024. The International developed equity index (MSCI EAFE) decreased by -2.27% in December and is up +3.82% for 2024. The emerging markets index (MSCI EM) decreased by -0.14% in December and is up +7.50% for 2024.
• In December, bond yields increased across maturities; the 30-year U.S. Treasury bond yield increased by 42 bps to 4.78%, the 10-year yield increased by 40 bps to 4.58%, and the 2-year yield increased by 12 bps to 4.25%.
• The Barclays U.S. Aggregate Index, which is a measure of U.S. Bond prices, decreased by -1.64% in December and is up +1.25% YTD.

ECONOMIC AND GEOPOLITICAL HEADLINES

• U.S. gross domestic product (GDP) in the third quarter of 2024 increased by 3.1%, according to the “3rd” estimate released by the Bureau of Economic Analysis. In the second quarter of 2024 GDP increased by 3.0%.
  
• The December Services PMI (formerly Non-Manufacturing Purchasing Managers Index) increased to 54.10% from 52.10% in November. This represents expansion and is above market expectations of 53.50%. The December Manufacturing PMI increased to 49.30% from 48.40% in November. Per the Institute for Supply Management (ISM), a reading above 50 is considered economic expansion and below 50 is considered economic contraction.
  
• December non-farm employment increased by 256,000 jobs, and the unemployment rate declined to 4.1%, as reported by the Bureau of Labor Statistics on January 10th, 2025. In December employment increased in health care, government, social assistance, and retail. Average Hourly Earnings (wages) increased by 3.9% year-over-year in December.

PERFORMANCE UPDATES

• The Equity Fund decreased by -2.32% in December and is up 15.05% for 2024. The Bond Fund decreased by -1.55% in December and is up 1.42% for 2024. The Stable Value Fund was up +0.24% for December and is up 2.40% for 2024. The Northern Trust Global Sustainability Index Fund (GSIF) decreased by -3.38% in December and is up 16.39% for 2024.
  
• The Balanced Fund decreased by -2.68% in December and is up 6.85% for 2024. The Target Annuitization Date TAD 2025; TAD 2030; TAD 2035; TAD 2040 TAD 2045 and TAD 2050 returns were -0.74%, -1.64%, -1.98%, -2.05%, -2.11% and -2.16% respectively for December and up +5.10%, +7.60%, +8.72%, +10.61%, +11.61%, and +12.49% for 2024.